City, county start fiscal analysis for Chapman, Stewart annexations

CHICO — A consultant will soon be penciling out the cost to annex the Chapman-Mulberry and Stewart Avenue neighborhoods into Chico proper.

City and county staff met this week for a kickoff meeting to start the fiscal analysis, which is being paid for with $19,720 in county funds.

The report by consultant John Goss from Ralph Andersen & Associates is expected to be done by the end of April, and then the City Council will provide direction on how to proceed, said Fritz McKinley, the city's building and development services director.

"One of the first and foremost things is to find out what that would cost, what the financial realization is of annexing those areas," McKinley said. "It's a document everyone can take a look at and understand the benefits and ramifications."

Last fall, members of the city's finance committee said they were in favor of annexation but the city needs to be able to plan for the costs.

Through annexation, the city would assume the expense and responsibility for services now provided by the county, including police, fire and general services. Unlike new development, which brings new residents that generate additional tax dollars, it's unclear how much — if any — revenue the city stands to gain through annexation.

Yet the transition is likely inevitable, even though some residents have resisted annexation in the past.

The controversial annexation plan is a component of the sewer service agreement that would allow connection of unincorporated parcels to city sewer, as mandated by the Regional Water Quality Control Board to address nitrates in the groundwater.

"The motivation is this will get into our nitrate action program, which is putting sewers in the ground and removing septic tanks from the Chico urban area," McKinley said.

The city and county have been working together on the nitrate compliance project, which brought main sewer lines and laterals into Chapman-Mulberry last year and will soon come to Stewart Avenue neighborhood.

People living in unincorporated areas of the county are required to get a sewer service agreement to access the city-provided service, and a county annexation plan would help with a master sewer service agreement, said Butte County program development manager Casey Hatcher.

"It doesn't mean that area is going to be annexed tomorrow or that it will be annexed in five years," she said. "It's looking at what it would cost."

The county is committed to partnering with the city and evaluating the fiscal implications to both the county and the city.

From 1990 to the present, about 7,000 acres have been annexed into the city, eliminating pockets or "islands" of unincorporated area. The city continues working with Butte Local Agency Formation Commission to address annexation of the remaining 11 unincorporated islands within city limits, including these two neighborhoods.